The House Ways and Means Committee on Thursday approved a substitute bill seeking to reduce or suspend the excise taxes on petroleum products.

The panel, chaired by Albay Representative Joey Salceda, approved the measure that will reduce excise taxes on diesel, kerosene, and liquified petroleum gas to zero.

It proposes that excise taxes on low-octane gasoline, used primarily by tricycle drivers, will be reduced, while taxes on premium gasoline will be retained.

The excise tax suspension on fuel products will be for six months.

“It’s immediate relief for Filipino families, especially affected sectors. The bill will cost the government around PHP45 billion, but what the government loses, the consumer gains,” Salceda said.

Salceda said that there is a self-correcting mechanism in the bill, noting that it would revert to the Tax Reform for Acceleration and Inclusion (TRAIN) law rates if the prices normalize.

“If it goes back to 65 dollars per barrel of crude oil, then the excise tax rates will also normalize,” he said. “The premise of this tax relief bill is that the situation is not normal. If inflation weren’t so high, we would be discussing other matters. But now, consumers are hurting. Inflation is high. Incomes are depressed. So, immediate relief is obviously necessary.”

He expects the House to transmit the bill to the Senate by the third or fourth week of November, since this is a priority measure of Speaker Velasco.

The measure also creates a special fund that will be devoted explicitly towards ayuda (cash assistance) for affected sectors whenever oil prices go up.

The Social Impact Stabilization Fund will be funded by a charge of PHP2 per liter of diesel and gasoline when global prices reach lower than USD45 per barrel of crude.

“The government manifested in our hearings that the problem with asking for a subsidy that is larger than their PHP1 billion fund for PUVs (public utility vehicles) is the lack of sources. This one answers it for future oil price problems,” he said. (PNA)